Why Natural Health Product Liability Insurance is Important

You believe in your products and the benefits they provide which is why you’ve put your money where your mouth is. Your investment as manufacturers, importer/exporters, component suppliers, online retailers, traditional retailers, distributors or packager/labellers of natural health products needs to be protected from the minefield that the organic health products industry can be. Natural or organic health product liability insurance can help protect you from the massive legal costs to defend your business in case you’re named, rightly or wrongly, in a bodily injury or property damage lawsuit. 

Natural Health Product Regulation

As you are no doubt aware, Health Canada’s Natural and Non-prescription Health Products Directorate (NNHPD) oversees the Canadian natural health product industry. They currently define natural health products (NHPs) in the Natural Health Products Regulations as:

  • Probiotics
  • Herbal remedies
  • Vitamins and minerals
  • Homeopathic medicines
  • Traditional medicines such as traditional Chinese medicines
  • Other products like amino acids and essential fatty acids

These products must be over-the-counter as prescription products do not fall under this definition of a natural healthy product. 

For updates and changes to the laws regarding natural health products, it’s a good idea to bookmark and regularly check Health Canada’s Drugs and Health Products page. It’s also a good idea to read the Regulations if haven’t already done so or haven’t done so in while, as it contains policy, guidelines and laws regarding:

  • Products and site licensing
  • Good manufacturing practices
  • Clinical trials involving human subjects
  • General information around 
    • Electronic records
    • Packaging
    • Inspections
    • Imported natural health products
    • Exporting certificates and more
  • Amendments to the Regulations
  • Schedules to the Regulations that delineate substances that are included and excluded from the definition of natural health products  

Natural Health Product Insurance, Why is it Important?

Knowing the regulations is the first step in protecting you from natural and organic health product liability but proper risk-management must include insurance protection for your business as mistakes, contamination and faulty information still happens regardless of the protocols you have in place.

If your business is served with a lawsuit claiming the products your company is involved with caused bodily injury, illness or property damage, organic health product insurance can provide coverage for:

  • Lawyers’ fees
  • Defence costs
  • Out-of-court settlements 
  • Damages awarded by the court

Natural Health Product Insurance – Who is it for and how much does it cost?  

Healthy supplements including vitamins, sexual wellness/performance, herbal supplement, sports nutrition and others. Some of the products that can be covered by the product liability insurance coverage include:

  • Nutraceuticals/bioceuticals, herbal remedies
  • Herbs and botanicals
  • Creams, tinctures, cosmetics, soaps, cleansers, essential oils

Some of the factors that are considered by insurance companies when determining your eligibility and rates for product liability insurance include:

  • All products and sub-categories of products being sold
  • Historic and projected sales of those products
  • Percentages of Canadian sales, American sales and global sales
  • Quality control measures including testing
  • Years of experience

Also Protect Your Natural Health Product Company with Product Recall Insurance

For more information on natural health product liability coverage, visit our Product Liability Insurance 101 page. We also highly recommend Product Recall Insurance coverage for healthy product companies as it can provide coverage for recall costs including replacement costs, disposal fees, testing costs and brand rehabilitation expenses.

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